The tenth edition of Consumer Class Actions published by the National Consumer Law Center is now in publication. Vildan Teske is one of the national class action lawyers who served as a contributing author for this book. Herb Newberg, author of Newberg on Class Actions has praised Consumer Class Actions stating it “[c]omprehensively guides lawyers through the entire spectrum of class action litigation. … Invaluable, succinct resource for new and experienced class action practitioners.”
On December 10, 2019, Marisa Katz presented at the MSBA-sponsored CLE Can Consumer Arbitration Be Fair and Equitable? Marisa was one of three panelists addressing the everyday implications for consumers who are cheated by businesses when forced arbitration clauses and class action bans prevent any redress in a court of law. Given the Federal Arbitration Act and the Supreme Court’s expansive reading of that Act, federal courts are, by and large, not open to consumer plaintiffs with disputes against businesses that use these unfair agreements, where negotiation is impossible, and where arbitration proceedings are kept out of the public eye. This event was co-sponsored by the Alternative Dispute Resolution and Consumer Law Litigation Sections of the MSBA.
On Monday, October 30, Marisa Katz co-presented a CLE at St. Thomas School of Law with Congressman Keith Ellison (D-Minn.) on forced arbitration clauses. Congressman Ellison addressed last week’s vote in the Senate that rescinded the Consumer Financial Protection Bureau’s (CFPB) rule that would have banned class action waivers in forced arbitration bans in consumer contracts.
Marisa discussed recent key U.S. Supreme Court cases on this topic and the Court’s continued role in shutting the courthouse doors to consumers, employees and small businesses. Both speakers discussed how to keep up the fight against forced arbitration and class action bans in the current political environment.
The presentation, “On Our Terms: Mandatory Arbitration Clauses Stopping Courts from Granting Justice,” was sponsored by University of St. Thomas School of Law’s Law Democrats.
On Wednesday, April 26, Hennepin County District Court Judge Daniel H. Mabley issued an order granting Plaintiffs’ motion for class certification. Teske Katz Kitzer & Rochel represents a class of Minnesota consumers who took out payday loans from Payday America, Inc. between October 2, 2013 and December 31, 2016. The named plaintiff and class representative, Randy Holte, filed this lawsuit in 2015 challenging several of Payday America’s practices: (1) charging fees on payday loans in excess of the maximum rates allowed for closed-end loans, (2) failing to properly disclose the annual percentage rate, and (3) engaging in prohibited debt collection practices.
The Court’s order granting class certification is available here.
Teske Katz Kitzer & Rochel attorneys, Vildan Teske and Marisa Katz, have been appointed Class Counsel in this litigation. Marisa Katz, who briefed and argued the motion, noted, “Today’s certification order is a critical next step in our ongoing effort to stop the predatory business practice in which this defendant lends money to Minnesota’s most cash-strapped and vulnerable consumers.”
Teske Katz Kitzer & Rochel looks forward to its continued role in advocating for consumer lender compliance under the law and marketplace fairness.
On Sunday, the Minneapolis Star Tribune featured an article about the current state of forced arbitration of consumer disputes: “Debate over forced arbitration finds its second wind, with help from events like Wells Fargo scandal.” Teske Katz Kitzer & Rochel partner Vildan Teske is quoted in the article, noting that there have been recent developments in the fight against forced arbitration in consumer disputes, but that the latest changes only provide a “patchwork of protection.”
Teske has been a strong and vocal advocate for consumers, particularly in the fight to curtail forced arbitration and to reinforce consumers’ rights to use the judicial system when they have been harmed. Teske has presented on the issue many times, including along with U.S. Senator Al Franken and other notable consumer rights experts. Teske has also testified before the U.S. Senate Judiciary committee.
On Monday, May 16, Hennepin County District Court Judge Thomas M. Sipkins, issued an order denying defendant payday lender, PayDay America, Inc.’s motion to dismiss a class action filed by Teske Katz Kitzer & Rochel on behalf of a class of consumers who allege that PayDay America sold them high-cost loans in violation of Minnesota law governing consumer credit and regulated lending. The Court’s order is available here.
In particular, the Plaintiffs’ Class Complaint alleges that Payday America, Inc. charged certain fees for payday loans in excess of the maximum rates allowed for closed-end loans under state law, failed to meet certain disclosure requirements with respect to the calculated annual percentage rate, and engaged in prohibited debt collection practices in connection with the subject loans.
Teske Katz Kitzer & Rochel attorney Marisa Katz briefed and argued the case in opposition to Payday America Inc.’s motion to dismiss. Ms. Katz noted, “This victory is significant for consumers across the state of Minnesota, who are all-too-often trapped in cycles of debt, often as a result of predatory payday lending practices.”
The firm looks forward to prosecuting this case forward and its continued representation of Minnesota consumers. If you have questions about the Payday America case, or believe that your consumer rights have been violated contact us today for a confidential consultation.
Today, the Consumer Financial Protection Bureau (CFPB) released a new rule proposing the prohibition of mandatory arbitration clauses that deny groups of consumers their day in court. In the last several years, many contracts for consumer financial products and services – from bank accounts to credit cards to cellular phone contracts – have included mandatory arbitration clauses. These clauses affect hundreds of millions of consumer contracts and typically state that the company can require that disputes with consumers be resolved by privately appointed individuals (arbitrators). Where these clauses exist, companies are able to block lawsuits from proceeding in court. These clauses also almost always bar consumers from bringing class action claims through the arbitration process. As a result, no matter how many consumers are injured by the same unlawful conduct, they must proceed to resolve their claims individually against the company, often before arbitrators that rule in favor of the company 99% of the time.
In 2015, the CFPB released a comprehensive study showing that very few consumers ever bring – or think about bringing – individual actions against their financial service providers either in court or in arbitration. The study found that class actions provide a more effective means for consumers to challenge problematic practices by these companies. According to the study, class actions succeed in bringing hundreds of millions of dollars in relief to millions of consumers each year and cause companies to alter their legally questionable conduct.
The CFPB proposed rule issued today would ban companies from putting mandatory arbitration clauses in new contracts that prohibit class action lawsuits against them. The proposal would once again open up the legal system to consumers. Groups of consumers would have the opportunity to obtain relief from the legal system, and many companies would also be incentivized to comply with the law. Also, the CFPB would be able to monitor the individual arbitration process, providing insight into whether companies are abusing arbitration or whether the process itself is fair.
Teske Katz Kitzer & Rochel attorneys have spent years both inside and outside the courthouse advocating for consumers’ ability to seek redress in courts nationwide when they are harmed by the unfair and deceptive practices of businesses. For instance, Teske Katz Kitzer & Rochel partner Vildan Teske testified before the Senate Judiciary Committee in December 2013, advocating for the elimination of mandatory arbitration clauses in consumer contracts. Today’s announcement from the CFPB is a huge step for expanding consumer access to justice in the marketplace.
On August 26, 2015, the Hon. Gary Oxenhandler, state court judge in Columbia, Missouri, granted a motion to certify a class of Missouri borrowers with consumer claims against Cavalry Investments, LLC, and appointed Teske Katz Kitzer & Rochel as Class Counsel. Partners Vildan Teske and Marisa Katz are litigating this class action lawsuit along with the Missouri law firm of Angle Wilson Law LLC.
The class action lawsuit involves the sale of service contracts by certain auto dealers to consumers that require the consumers to use fluid additives before the protections of the contracts kick in. The plaintiff class alleges that these contracts are insurance products that are being sold illegally, and that, as a result, the debt buyers that purchased these faulty loans are collecting on the loans illegally and taking advantage of consumers in violation of the law.
This week a jury in Kansas City, Missouri awarded a consumer $251,000 in damages and $82 million in punitive damages in a case against the national debt collection firm, Portfolio Recovery Associates, LLC (“PRA”). PRA pursued the plaintiff, a Kansas City woman, for a debt she repeatedly told them was not hers. She was represented by the law firm of Slough, Connealy, Irwin & Madden, a firm with which Teske Katz Kitzer & Rochel has co-counseled on several consumer class actions over the years. The Kansas City Star has a story about the verdict here.
The Justice Department today announced a major victory for servicemembers under the Servicemembers Civil Relief Act (SCRA). The Justice Department reached a settlement with a group of mortgage servicers for improperly foreclosing on servicemembers’ homes. The five mortgage servicers are JP Morgan Chase Bank N.A. (JP Morgan Chase); Wells Fargo Bank N.A. and Wells Fargo & Co. (Wells Fargo); Citi Residential Lending Inc., Citibank, NA and CitiMortgage Inc. (Citi); GMAC Mortgage, LLC, Ally Financial Inc. and Residential Capital LLC (GMAC Mortgage); and BAC Home Loans Servicing LP formerly known as Countrywide Home Loans Servicing LP (Bank of America).
The DOJ press release is available here.